Treasurer Josh Frydenberg hits back after states GST warnings

TREASURER Josh Frydenberg says the federal government does not need backing from the states to push ahead with its overhaul of the GST.

TREASURER Josh Frydenberg will push ahead with a massive overhaul of the GST carve-up despite dire warnings from the states they could be left billions of dollars worse off under the plan.

The Treasurer invoked respected former Liberal leader John Howard’s philosophy on the GST carve-up this morning as he dismissed claims from NSW, Victoria, Queensland, South Australia and Tasmania that they could be billions of dollars worse off under a new distribution model which introduces a 75 cent floor for GST payments and delivers $9 billion extra to the states from federal coffers over a decade.

“John Winston Howard ... was on your show back in November 1998 and you put to him this question about the GST formula and he said ‘I’m an Australian and as far as I’m concerned all Australians should be treated equally no matter where they live - I’m not interested in arguments from a state premier that he’s somehow carrying someone else’s load’, and that’s when he was talking about Bob Carr,” Mr Frydenberg told 2GB host Alan Jones.

Treasurer Josh Frydenberg has dismissed state warnings on the GST carve-up. Picture: Daily Telegraph, October 4, 2018.

It comes after the state treasurers yesterday demanded the federal government insert a written guarantee into the legislation that no state would be worse off under the changes.

Federal Labor has also backed the demand.

“The Commonwealth has modelled one scenario which shows no state is worse off but in reality it is possible, more likely probable, that as a result of this change the taxpayers of NSW will be worse off to the tune of billions of dollars if this guarantee (that each state won’t be worse off) is not put into law,” NSW Treasurer Dominic Perrottet told The Daily Telegraph.

Mr Frydenberg doubled down on his insistence that states will all be better off under the new distribution model today but also highlighted that the government did not need the states’ backing to pass the legislation through federal Parliament.

The government has so far rejected the call to put the guarantee in writing.

Treasurer Josh Frydenberg met with state treasurers yesterday in Melbourne to discuss the GST carve-up. Picture: AAP

“When it comes to changing the rate or the base of the GST, if you want to lift it up or down or if you want to take it off feminine hygiene products as we did yesterday or extend it to other things, you do need the approval of the states and the Commonwealth and the territories,” he said.

“But when you change the distribution, that can be done by the Commonwealth and that is what we’re proposing to do.

“We will take it through the Parliament.”

The government will need crossbench support to pass the GST changes if Labor doesn’t back the bill without amendments.

Mr Frydenberg argued it would be a “test of Bill Shorten’s credibility” if the Labor leader backtracked on his support for the reforms.

The government will introduce the legislation to pass the GST reforms when Parliament resumes from October 15.